pension income

This query is : Resolved

jalpa somaiya (Querist)
Follow

18 July 2009 adhoc sum received from UTI PENSION FUND is taxable or not?
i.e. rs.25,000 invested by x on 1-2-1998 in UTI pension scheme which was claimed as exemption u/s 80c now he received rs.80,000 on 12-2-2009 whether it is taxable or not?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

18 July 2009 Pl note that on 01/02/1998 section 80C was not in force. In view of that the depositor had either claimed deduction for the amount deposited u/s 80CCA or availed rebate u/s 88 of the Income tax Act,1961. Irrespective of whether a rebate or deduction was available while depositing to the pension plan the lump sum amount received towards annuity does not qualify for tax exemption and is thus fully taxable in the hands of the depositor. This can, therefore, hit a retired person hard if the effective tax rate falls under the highest income bracket.